Australia Post’s strengths is not only its monopoly in letters, strong brand with the Australia
public, but also management strategic thinking and positioning of the business units to meet
future challenges. Australia Post has developed strong links in the Asia Pacific region to provide
an integrated logistics solution to its clients. The partnership between Australia Post and China
Post to provide end-to-end supply chain to manage cross-border business functions. This allows
delivery from warehouse direct to customers from Australia’s largest import/export partner
China (James, 2007). Australia Post is the third largest importer of goods to Australia.
Weaknesses
Having a legislative obligation to provide letter services may cost Australia Post in the future if it
becomes unviable. Australia Post has also over extended itself in an attempt to provide agency
services. In 2006 it put many resources into selling Jetstar tickets, but ended up withdrawing
after it realized it would have to be exempt from travel agent licensing requirements. Over
extending on agency services may be a weakness.
Opportunities
There are also opportunities in agency services using the Australia Post network, if managed
correctly with an adequate fit. This is evident in its move into general insurance. This may be
risky as a report by UBS consultancy found that customers are unwilling to leave existing
established financial companies (James, 2009). Moves into car insurance are another opportunity
to compliment existing over-the-counter banking, international money transfer, bill payments,
and identity checking (Sibillin, 2009).
Threats
The external threat in letters is from the social trend of the lowering of use of paper letters. This
is evident in international trends over recent years. Australia Post recognize this is only viable
with an increase in basic postage rate, which may put the cost of letters out of the market.
Another threat is the move form an international player in the complete end to end logistics
market that is offered by Post Logistics.
Changes and Challenges
As Australia Post is competing with electronic mail which is delivered instantly and courier
companies which are paid a premium to deliver direct to the customer, Australia Post must
uphold delivery standards to compete. For the financial year 2008-09 it has been able to meet the
following benchmarks: delivered 96.4% of large parcels on time or early, delivered 99% of
Express Post items on time or early, Post eParcel increased business by 13%.
To meet the challenges ahead, the Managing Director Graham John, points to the continued
investment in technology to improve efficiency and the customer service and the expansion
further into business to business logistics. There is also the challenge of meeting the demands of
complete supply chain logistics solutions as provided by Australia Post with the assistance of its
strategic partners both in Australia and in particular in China.
Recommendations For Next 5 to 10 years
Given the analysis and challenges outlined above, each of the three business units require unique
recommendations moving into the future.
Letters distribution will have to cost management will have to be monitored closely as the
numbers of items drop to an uneconomic level. Especially as there is a legislative obligation to
deliver mail to all parts of Australia. If higher prices for postage to represent increased costs are
able to be achieved through the Productivity Commission and efficiencies in deliver when using
the expanded parcels and logistics network then the letters business unit may remain viable. By
using the technology and distribution networks, including the private carriers, then letters can
continue to make a profit.
As mentioned earlier, the most competitive but the business unit where there is the most potential
is in Parcels and Logistics. By using integrated supply chain techniques, that is not only
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